Axis Bank’s latest investor interactions suggest steadier growth and stable asset quality ahead, prompting Jefferies to reiterate its Buy call on the lender. The brokerage maintained its price target of Rs 1,430, implying an upside potential of about 13%. Jefferies said the bank’s balanced growth plans, improving deposit mix, and contained credit costs position it well for FY26, even as the broader sector faces uneven deposit and loan momentum.
The brokerage added that Axis Bank’s operating environment remains supportive. Wholesale demand is stable, retail origination is healthy, and the bank is gradually improving its liability profile. Jefferies said these elements together create enough visibility for mid-teen earnings growth, provided credit costs remain within the guided range.
Jefferies on Axis Bank: Growth ahead of sector
Jefferies said Axis Bank expects overall growth to stay slightly ahead of the industry. Retail demand is firm, with healthy traction across mortgages, personal loans, and credit cards. SME trends remain stable. Wholesale disbursements moderated due to fewer sanctioned loan requests, but the bank maintained that the corporate pipeline should improve as business volumes pick up.
The brokerage noted that Axis Bank continues to invest in segments where it expects multi-year opportunities. Cards, personal loans, and MSME remain focus areas. Mortgages have also stabilised after a slow patch, and the bank is scaling up its affordable home loan vertical through Bharat Banking.
Jefferies on Axis Bank: CASA mix and deposit flow
Jefferies said deposits are growing broadly in line with expectations. The bank continues to face pressure on its current and savings account mix, though it sees room for gradual improvement. Axis Bank indicated that CASA ratios may see a slow rise as the mix of retail savings improves and higher-rated corporates return to normal operating balances.
Retail term deposits remain strong. However, the bank expects rising competition for deposits across private and PSU banks to keep rates firm. Jefferies said Axis Bank’s strategy is to deepen granular sourcing rather than chase bulk deposits, which helps manage funding costs better over time.
Jefferies on Axis Bank: Margin stability
Jefferies said Axis Bank expects net interest margins to remain stable. The bank sees limited pressure on yields given its focus on retail and SME expansion. Loan yields are unlikely to improve meaningfully in the near term, but the mix shift toward higher-margin products will offer some support.
The brokerage added that deposit costs will stay sensitive to liquidity conditions. Axis Bank said it is confident of maintaining margins within a tight band, helped by better pricing control and improving mix. Jefferies said this stability in margins is one of the key reasons it remains constructive on the stock.
Jefferies on Axis Bank: Asset quality firm
Axis Bank’s asset quality trends remain steady. Gross slippages are in line with internal expectations. Recoveries and upgrades remain healthy. Collection efficiency is stable across product segments.
Jefferies said the bank does not expect a material rise in credit costs. It maintains credit-cost guidance at around 1.2%, with the possibility of modest upside if recoveries continue to come in strong. The brokerage added that unsecured retail stress is manageable and well within the bank’s risk appetite.
Overall provisioning remains adequate. Jefferies said Axis Bank’s buffers allow flexibility to absorb any near-term volatility in asset quality without affecting profitability.
Jefferies on Axis Bank: Fee income and operating metrics
Jefferies said fee income remained strong during recent interactions with management. Cards and retail payments continue to drive fee growth. The bank is also gaining traction in distribution fees, helped by its expanding customer base and deeper penetration in wealth and insurance cross-sell.
Cost trends are broadly stable. Axis Bank expects operating expenses to normalise, with earlier investments in technology and branches now beginning to show productivity gains. Jefferies said the bank remains confident of achieving positive jaws going forward.
Jefferies on Axis Bank digital and retail distribution
The bank continues to emphasise digital sourcing. Jefferies said Axis Bank’s focus on digital onboarding and analytics-led underwriting is driving efficiency across retail origination. The bank has expanded its digital channels to bring more customers into high-interaction journeys, improving cross-sell potential.
Physical expansion remains steady. Branch additions continue in both metro and semi-urban regions. Jefferies said this combination of digital and physical strength is one of Axis Bank’s competitive advantages.
Jefferies on Axis Bank valuation and upside
Jefferies kept its Buy rating with a target price of Rs 1,430. At the current price of Rs 1,276.60, this implies an upside potential of around 13%. The brokerage values Axis Bank at 1.6 times adjusted book value for December 2026, reflecting its expectation of steady earnings growth and improving profitability.
Jefferies said the bank’s returns are set to improve gradually as margins stabilise, operating leverage expands, and credit costs remain contained. The brokerage added that Axis Bank is well-positioned to capture retail-led credit demand and sustain momentum across core banking businesses.